ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE - 1, BELAGAVI vs. SHRI SOMESHWAR SAHAKARI SAKKARE KARKHANE NIYAMIT., BELGAVI

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ITA 408/PAN/2018Status: DisposedITAT Panaji20 September 2023AY 2011-12Bench: SHRI R.S. SYAL (Vice President), SHRI S.S. VISWANETHRA RAVI (Judicial Member)3 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that there was no clear basis for the AO's valuation and that both parties agreed the matter required fresh examination by the AO. Therefore, the matter was remanded for fresh consideration.

What were the facts?

The Revenue appealed the deletion of an addition made on account of undervaluation of closing stock. The assessee valued the closing stock at Rs. 2,525/- per Quintal, while the AO calculated it at Rs. 2,597/- per Quintal.

What were the issues?

Whether the CIT(A) was justified in deleting the addition made by the AO on account of undervaluation of closing stock, and the correct valuation method for closing stock.

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PANAJI

Before: SHRI R.S. SYAL & SHRI S.S. VISWANETHRA RAVI

For Appellant: Shri Praveen Ghali
For Respondent: Shri P.S. Shivshankar

Heard together (2 matters)

ITA No.408/PAN/2018
CO No.02/PAN/2022

Read from the judgment's own cause title. This page is filed under one of them.

आदेश / ORDER

PER S.S. VISWANETHRA RAVI, JM :

1.

This appeal by the Revenue against the order dated 06-07-2018 passed by the Commissioner of Income Tax (Appeals), Belagavi [‘CIT(A)’] for assessment year 2011-12. The assessee has also filed Cross Objection in the appeal filed by the Revenue.

2.

We find that this appeal was filed with a delay of 02 days. After hearing both the parties, we condone the said delay.

3.

The ld. AR, Shri Praveen Ghali submits that the assessee is not interested to prosecute the cross objection. Hence, the same is dismissed as not pressed.

4.

The Revenue raised five grounds of appeal amongst which the only issue emanates for consideration is as to whether the CIT(A) justified in deleting the addition of Rs.4,80,45,478/- made on account of undervaluation of closing stock.

5. We note that the assessee valued the closing stock at Rs.2,525/- per Quintal, whereas, the AO worked out the closing inventory of sugar at Rs.2,597/- per Quintal and accordingly added the difference under valuation to the income of the assessee. The CIT(A) deleted the addition made by the AO taking into consideration the method of valuation of stock being followed by the assessee year after year. On perusal of the assessment order, we note that the assessee itself filed cost working sheet of production as per which cost of production at various stages arrived towards factory cost inclusive of other overheads but before accounting of CO No. 02/PAN/2022, A.Y. 2011-12 sales of by products at Rs.2,597/- per Quintal and action towards cost of final product at Rs.2,801/- per Quintal and there is no basis as evident from the impugned order whether to take into account the value at Rs.2,597/- or Rs.2,801/-, in the absence of which as both the parties agreed that the issue requires examination by the AO and fairly conceded to remand the matter to the file of AO for its fresh consideration. Therefore, taking into facts and circumstances of the case and in the interest of justice, we deem it proper to remand the matter to the file of AO for its fresh consideration. The assessee is liberty to file evidences, if any, in support of its claim. Thus, the grounds raised by the Revenue are allowed for statistical purpose.

6.

In the result, the appeal of Revenue is allowed for statistical purpose and the cross objection raised by the assessee is dismissed.

Order pronounced in the open court on 20th September, 2023.

Sd/- Sd/- (R.S. Syal) (S.S. Viswanethra Ravi) JUDICIAL MEMBER VICE PRESIDENT पुणे / Pune; ददनाांक / Dated : 20th September, 2023. रवव आदेश की प्रवतविवप अग्रेवषत / Copy of the Order forwarded to : अपीिार्थी / The Appellant. 1. प्रत्यर्थी / The Respondent. 2. 3. The CIT(A), Belagavi. 4. The Pr. CIT, Belagavi. ववभागीय प्रवतवनवि, आयकर अपीिीय अविकरण, पणजी, 5. / DR, ITAT, Panaji. गार्ड फ़ाइि / Guard File. 6. //सत्यापपत प्रपत// True Copy// आदेशानुसार / BY ORDER,

वररष्ठ वनजी सविव / Sr. Private Secretary आयकर अपीिीय अविकरण ,पुणे / ITAT, Pune

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